Stock market today: Most of Wall Street rallies, even as Nvidia drags

NEW YORK — Most U.S. stocks are rising Monday, but another slide for Wall Street heavyweight Nvidia is keeping indexes in check.

The S&P 500 was 0.2% higher in morning trading and nearing its record set last week. The Dow Jones Industrial Average was up 404 points, or 1%, as of 10:45 a.m. Eastern time, and the Nasdaq composite was 0.5% lower.

Stocks of oil-and-gas companies are leading a widespread rally, where nearly 85% of the stocks in the S&P 500 are climbing. Exxon Mobil rose 2.1%, and oilfield services provider SLB gained 3% as oil prices hovered near their highest levels since April.

The S&P 500’s gain would have been even bigger if not for a drop of 5.5% by Nvidia. The chip company is heading toward a three-day losing streak after rocketing 1,000% higher since the autumn of 2022. Nearly insatiable demand for Nvidia’s chips to power artificial-intelligence applications have been a big reason for the U.S. stock market’s run to records recently, even as the economy’s growth slows under the weight of high interest rates.

The AI boom has been so frenzied that it’s raised worries about a possible bubble in the stock market and too-high expectations among investors. Nvidia’s stock has been pulling back since it briefly overtook Microsoft as Wall Street’s most valuable last week. It’s coming off its first losing week in the last nine.

Because Nvidia has become so massive in size, the moves that its stock makes carry extra weight on the S&P 500 and other indexes. It was the heaviest weight by far on the S&P 500 Monday.

RXO jumped 19.7% after it agreed to buy the Coyote Logistics freight brokerage business from UPS for nearly $1.03 billion. RKO said the deal will make it North America’s third-largest provider of brokered transportation. UPS, which bought Coyote in 2015 for $1.8 billion, rose 2.1%.

Under Armour swung from an early loss to a gain of 1.4% in its first trading after saying it agreed to pay $434 million to settle charges raised by shareholders related to its accounting and sales practices. The shoe and athletic wear company denied any wrongdoing in the settlement, but it also agreed to separate the roles of chairman and CEO for at least three years.

In the bond market, Treasury yields were holding relatively steady. The yield on the 10-year Treasury edged down to 4.25% from 4.26% late Friday.

It’s been mostly falling since topping 4.70% in late April, which has relaxed the pressure on the stock market. Yields have been sinking on hopes that inflation is slowing enough to convince the Federal Reserve to cut its main interest rate later this year.

The Fed has been keeping the federal funds rate at the highest level in more than 20 years, hoping to grind down on the economy just enough to get inflation under control.

Fed officials may be underappreciating just how much the U.S. economy is slowing, according to economists at UBS led by Abigail Watt. They see growth slowing to below a 2% annualized rate in the first half of 2024, down from 3.1% growth in the fourth quarter of 2023 from a year earlier.

The UBS economists say U.S. households in the bottom 40% of the country for income are now burning through their savings after fully depleting the cushions they built during and immediately after the pandemic. That could further slow retail sales, which have been up and down as companies highlight how lower-income customers are often struggling to keep up.

Wall Street is actually hoping for a slowdown in the economy, one that will take upward pressure off inflation and push the Federal Reserve to cut rates. Goldman Sachs economist David Mericle said a rate cut could happen as soon as September if inflation reports like one coming up on Friday turn out as expected.

The Fed just needs to make sure it cuts interest rates at the right time. If it waits too long, the economy’s slowdown could careen into a recession. If it’s too early, inflation could reaccelerate.

In stock markets abroad, indexes rose across much of Europe after mostly falling in Asia.


AP Writers Matt Ott and Zimo Zhong contributed.

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